Why globalism is good for you
THE DIFFERENCE between globalization and globalism might seem obscure and unimportant, but it matters. Globalization is a word used by economists to describe international flows of trade, investment and people. Globalism is a word used by demagogues to suggest that globalization is not a process but an ideology — an evil plan, pushed by a shadowy crowd of people called “globalists.”
In his recent speech at the UN, Donald Trump declared: “We reject the ideology of globalism and embrace the doctrine of patriotism.” Last week he again denounced “globalists” at a campaign event, while the crowd bayed for the imprisonment of George Soros, a Jewish philanthropist regarded as the epitome of “globalism” by the nationalist right.
It is not just the radical right that attacks globalization as an elite project. Many on the left have long argued that the international trading system is designed by the rich and harms ordinary people.
But this right-left ideological assault on globalization is simple-minded and dangerous. It ignores the benefits that trade has brought, not just to elites, but to ordinary people all over the world. It suggests that globalization is a plot rather than a process. And by promoting nationalism as the antidote to the dreaded “globalism”, it unleashes forces that are economically destructive and politically dangerous.
Between 1993 and 2015 — the heyday of globalization — the proportion of the world’s population living in extreme poverty almost halved. International trade has helped to pull billions of people into the global middle class and turned once poverty-stricken countries such as South Korea into wealthy nations. (North Korea, by contrast, has enjoyed all the benefits of total isolation from global markets).
Mr. Trump and his acolytes argue that this Asian prosperity has been bought at the expense of the middle class in the west. But middle-class lifestyles in the west now depend, to a significant extent, on the flow of cheap goods from the rest of the world. An iPhone that was wholly manufactured in the US would cost around $2,000 in the shops — or double its current price. Competition from cheap labour in Asia and Latin America has indeed contributed to the stagnation in real wages in the US. But rather than counteract this through public policy, the current US administration has driven rising inequality through regressive taxation.
Mr. Trump and his European equivalents have also talked
up the myth that dastardly globalists, like Mr. Soros, are encouraging and funding illegal migration. In doing so, they fan the paranoid fantasies that led to attacks like the mass killing that took place at a synagogue in Pittsburgh this weekend. For many anti-Semites, “globalist” has become a synonym for Jew. It should not need stating, but it is absurd to suggest that “globalists” have caused the violence in Syria or Honduras from which migrants are fleeing.
Critics of globalization have every right to start a debate about migration, trade and investment. But their “solutions” are often half-baked, and risk worsening the economic situations of the people they purport to help.
Brexit is, sadly, a prime example. The Brexiters’ complaints about the EU echo many of Mr. Trump’s complaints about “globalism.” “Europe” is blamed for uncontrolled migration, international bureaucracy and elitism. The Brexiters think of the EU as an ideological project. They ignore the extent to which European legislation is often a set of practical solutions to cross-border issues such as the free flow of goods and the establishment of common trading standards. Attacking those solutions is a bit like ripping out the plumbing in a house. Unless you have a very precise idea of what you are doing (and nobody has accused the Brexiters of that), you simply create a horrible mess.
What is happening in the UK is a microcosm of what could happen in the rest of the world if and when a Trump-inspired assault on international trade and global supply-chains gathers force. The tariffs that Mr. Trump has imposed on goods from China and elsewhere will increase the cost of living for Americans. Meanwhile, fears of a global trade war already weigh heavily on the stock market.
The biggest dangers, however, are not economic but political. By repeatedly denouncing “globalists,” Mr. Trump has encouraged the idea that America faces an unpatriotic enemy within. That, in turn, stokes the conspiracy theories that are now spilling over into violence on US soil.
The political risks are also international. The rise in economic tensions between the US and China is merging with a rise in military tensions over issues such as Taiwan and the South China Sea. Both Washington and Beijing are increasingly using the language of conflict rather than co-operation.
All this is reminiscent of the backlash against globalization in the 1930s, a process chronicled by Harold James, a Princeton historian, in The End of Globalization. Mr. James showed how surging protectionism in the 1930s went hand-in-hand with a rise in radical ideologies and a drift to war. He thinks it “highly likely” that today’s “deglobalization” will also culminate in war.
“Globalist” business people and financiers doubtless have their flaws. But at least their instinct is to see foreigners as customers, rather than enemies.